Estrogen appears to be important for cognitive function and emotional well- being in postmenopausal women. After menopause, estrogen levels drop to approximately 12% of the levels found during fertility. Among surgically menopausal women, those receiving estrogen replacement therapy (ERT) show no decline in cognitive functioning four months post-surgery, whereas those receiving placebo declined significantly on many measures. Similarly, ERT improves attention and self-reported memory functioning and mood. Psychiatrically, postmenopausal women report milder depressive symptoms and decreased anxiety while receiving ERT. Ongoing studies of the effect of estrogen on cognitive performance in young, healthy women suggest that some cognitive abilities improve with increased estrogen while others decline. Women perform slightly better on tests of verbal memory and verbal fluency, as well as tests of psychomotor speed and manual dexterity, during phases of the menstrual cycle when estradiol levels are high. In contrast, they perform slightly better on spatial tests and mental rotations when estradiol is low. These findings suggest that ERT may affect verbal and nonverbal cognitive abilities differentially, though this has not yet been studied systematically. In contrast to the relatively sudden drop in estrogen experienced by aging women, aging men experience a gradual loss of testosterone, with the level at age 80 being approximately 30% of that at age 30. Male rats show improved memory, attention and spatial performance when treated with testosterone. Similar effects have been observed in humans. In a recent study, older men whose testosterone levels were raised to 150% of baseline showed a significant improvement in spatial cognition. A similar finding was observed in hypogonadal men treated with testosterone, though these men also demonstrated a worsening of word recall. Some studies suggest that the relationship between testosterone level and spatial cognition is nonlinear. Men with naturally low testosterone levels perform best on spatial tasks, and men's performance on spatial tasks is best in the spring when testosterone is typically the lowest. The association between high levels of testosterone and poor spatial cognition may be due to the conversion of testosterone into estradiol in the basal forebrain and its binding with estrogen receptors. As discussed above, there is a strong, negative relationship between spatial cognition and estradiol. This study is the first to use double-blind, placebo-controlled, cross-over procedures to investigate the effectiveness of hormone replacement therapy (ERT) in enhancing mood and cognition in both men and women over age 65. It would also improve upon previous studies by including among its outcome measures: 1) tests of spatial and verbal cognitive abilities; 2) measures of negative and positive affect, and 3) an assessment of everyday cognitive "slips". Importantly, unlike previous studies that merely assumed a particular blood hormone level, this study employs redioimmunoassay techniques to measure hormone levels.